Days of Thundelarra

As a function of its recent deals with
OZ Minerals
and Korean smelting giant LS Nikko, for the second year in a row
Sandfire Resources
found itself a major talking point of the Diggers and Dealers Mining Forum in Kalgoorlie last week.

But this year the company had to share the limelight with one of its neighbours exploring in Western Australia’s Bryah Basin,
Thundelarra Exploration
.

On the opening day of the event, Thundelarra announced it had intersected massive sulphide copper mineralisation with the third hole drilled on its Red Dome prospect, just 500 metres from Sandfire’s high grade DeGrussa copper and gold discovery.

The news sent Thundelarra shares soaring 24 per cent to 83¢ on the day. The upward momentum carried on through the rest of the week, with the stock finishing at 96.5¢ on Friday.

Although it is still very early days for Thundelarra, the initial results – including an intercept of 18 metres grading 8.37 per cent copper from a depth of 28 metres – suggest the company may have its foot on the best part of the Doolgunna system, which hosts DeGrussa.

If this proves true, the company will have thrust itself firmly into the calculations of any group pondering a buyout of Sandfire.

The reason this can be said with certainty becomes clearer when you look at a map showing tenement ownership in the Doolgunna region.

The tenement that contains Thundelarra’s Red Dome prospect is a small square that sits isolated within Sandfire’s larger tenement holding.

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So the story goes, Sandfire managing director
Karl Simich
made several approaches to the prospector that owned the ground. But for reasons unknown, he was rebuffed.

Thundelarra, which has pegged other tenements around Sandfire’s Doolgunna landholding, approached the prospector earlier this year, and he agreed to a deal.

There would be little sense in separate companies developing separate mines within such close proximity to each other.

Thundelarra will probably be better off doing a deal to sell Red Dome to Sandfire or whoever ends up owning the surrounding tenements.

But the company is unlikely to do anything like this until it has a better handle on the extent of the mineralisation the tenement contains.

Thundelarra’s success at Red Dome adds weight to the geological theory that as a volcanogenic massive sulphide-style deposit, DeGrussa does not exist in isolation, but rather is one of a series, or “camp", of deposits.

Three subsequent discoveries by Sandfire on its ground also appear to provide confirmation of this theory.

This is the reason a bunch of exploration companies, including Thundelarra, Alchemy Resources, Enterprise Metals and Talisman Mining rushed to peg ground around Doolgunna after the DeGrussa discovery.

At Diggers last week, OZ Minerals chief executive
Terry Burgess
said he was keeping a watching brief on all the companies active in the region.

“We’ve seen a lot of [nearology] around that Doolgunna area, and I think it will be interesting to see what comes of it," he said.

“We think [DeGrussa] is an interest deposit, and potentially an interesting area."

OZ paid $100 million for a 19.9 per cent stake in Sandfire last month, but Sandfire has refused to grant OZ a seat on its board.

OZ’s stake will also be diluted due to Sandfire’s subsequent agreement to sell 12.5 per cent of the company to LS Nikko.